UPDATE 1-Oil and tobacco give FTSE 100 a boost

* Midcaps Dunelm, Galliford rise after updates (For a live blog on European and U.S. stock markets, click LIVE/ or type LIVE/ in an Eikon news window.)

By Danilo Masoni

MILAN, Sept 12 (Reuters) - Stronger crude prices and a rally in tobacco stocks gave a boost to Britain’s top share index on Wednesday, while a profit warning hit energy provider SSE.

The FTSE 100 ended up 0.55 percent at 7,313.36 points, having hit its lowest point in five months in the previous session.

The internationally-exposed index has lost ground in recent weeks as the pound strengthened, on the back of growing optimism over a Brexit deal, and worries over trade and emerging markets kept investors wary.

However, sterling saw some weakness on Wednesday on reports of a potential challenge to Prime Minister Theresa May.

BP and Shell rose 1.6 percent and 1 percent respectively, after Brent prices reached $80 following a larger-than-expected drop in U.S. crude inventories and as sanctions on Iran added to concerns over global oil supply.

SSE tumbled 8.3 percent to its lowest since February 2011 after it warned first-half profit would halve due to the impact of dry, still and warm weather, and persistently high gas prices.

“It is very rare to see a profit warning from a utility company as they are meant to have fairly predictable income streams ... Ultimately it is a good reminder that even seemingly defensive companies still have operational and regulatory risks,” said Russ Mould, investment director at AJ Bell.

The SSE warning weighed on other utilities.

Tobacco stocks were in focus after the U.S. Food and Drug Administration said it was considering a ban on flavoured e-cigarettes in response to an “epidemic” of young people using them.

After the news, BAT and Imperial Brands turned higher to end up 5.8 and 3.2 percent respectively.

The FDA’s leader announced a number of steps the agency planned to take as part of a broader crackdown on the sale and marketing of e-cigarettes to kids.

Traders said the action was not as harsh as feared.

Among mid-caps, furniture retailer Dunelm Group reported flat annual profits after taking an 8.9 million pound charge in its efforts to complete the integration of loss-making internet business Worldstores. Its shares rose 11.8 percent.

“With forecasts held, stable trading, an acceleration in store openings to 10 stores for the year ahead, a reasonable showing from the new CEO may well yield some positive momentum in the share price,” said Peel Hunt analysts.